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Music Consumption Around the World

When discussing music habits, there is usually a focus on the U.S. and the U.K., as they are often deemed the largest consumers and producers of music. In reality however, there are several countries with larger music markets than the U.K., and many more countries whose markets are vastly increasing. In an earlier blog post, we discussed the fact that Japan is currently the second largest music market in the world, after the United States. As discussed in the post, Japan differs from other countries in that the majority of music there is still sold in physical formats, rather than gravitating towards music streaming and digital downloads like the other major music markets. Though this may seem like a fluke, it actually stems from cultural practices in which the Japanese value collecting beautiful items,photo-1460058418905-d61a1b4a55fe therefore preferring a deluxe CD with pictures, lyric books, and whatever other special items come with that. Music, like any other cultural artifact, is completely shaped by societal norms, values, and expectations, whether you are looking at lyrics, musical style, or even music consumption habits. To understand any given countries musical habits, it is imperative to understand their culture, and thus get a better sense as to why things are that way. This is not only interesting information, but will actually give pertinent insight in the best ways to market certain artists, and what can be done to increase profits. This post will focus on some of the most interesting, current music markets.

Germany

For years, Germany has maintained a spot in the top five largest music markets, making it an important country to study. What is interesting about Germany’s music consumption is that unlike the U.S. and U.K. whose physical music sales are dropping steadily in favor of digital, Germany has been able to maintain high physical format sales, while also increasing their digital and streaming market. According to the International Federation of the Phonographic Industry, “Physical format sales account for 70 per cent of the market and their value dropped by just 1.5 per cent in 2014, significantly below the 8.1 per cent global fall in physical sales.” Holger Christoph, vice president of digital sales at Universal Music Germany, states that younger consumers are contributing to the growth in streaming while music collectors and older consumers prefer buying physical copies and listening to complete albums. This high rate of physical purchases is the main reason Germany has been able to overtake the U.K. in music sales.

Frank Briegmann, president of Universal Music Germany, attributes high physical album numbers to “the popularity of deluxe packages and the stripped-down ‘Pur edition’ CD albums, which features simplified packaging and is traditionally released several months after the initial street dates.” The fact that physical copies of music come with special features is a huge draw for the consumer. It is a very smart way to increase sales that is lucrative to both the producer and the consumer. As music streaming continues its ascent, physical sales are bound to continue their decrease, even in Germany. Still, it is fascinating that they have been able to maintain such high numbers in comparison to other countries.

In addition to high physical sales, a unique aspect of German music culture is their nationalistic quality of supporting domestic repertoire artists. Increasingly, conphoto-1431069826965-10c61a19b835sumers demand music from local artists, leading to huge sales from German acts such as Rosenstolz, Ich + Ich, Tokio Hotel, and others. Domestic repertoire made up 50 per cent of the top 100 best-selling albums, which is remarkable considering the fact that the majority of largely successful artists usually come from the U.S. or the U.K. If other countries made such a huge effort in supporting local acts, they could potentially have similar results in increasing the success of their domestic music market.

South Korea

Another fascinating music market is that of South Korea. In 2014, South Korea’s music market hugely increased by 19.2 per cent. This can be compared to that of the U.S. which only increased 2.1 per cent. This rapidly developing music market makes it an interesting one to look at.

Like Germany, a lot of South Korea’s music market success can be attributed to their domestic repertoire. With the explosion of K-Pop, or Korean Pop, around the world, South Korea’s music market flourished, with K-Pop making up about 80 per cent of revenue. Similar to Japanese consumers, K-Pop artists are revered by the people, allowing them to sell high volumes of various Cphoto-1429962714451-bb934ecdc4ecD packages with different types of merchandise and exclusive items . As mentioned earlier, U.S. and U.K. artists are usually the only artists to breakout on an international scale. Surprising to all, K-Pop broke this trend and gained enormous popularity around the world, including in the U.S. There has been very little precedent of non-English songs doing well on a worldwide scale. Ted Kim, senior VP of CJ (a Korean entertainment company), attributes K-Pop’s popularity to their cool-factor stating:

“What people respond to is that these guys represent something different that’s kinda cool. There’s nothing else out there like this…It’s based on how you look, how you move, what your reactions are. That’s where people started responding and that’s the part where we get excited.”

This sudden interest in K-Pop has attracted American hip-hop artists, thus enticing even more new K-Pop fans, making this a reoccurring cycle that has allowephoto-1415886541506-6efc5e4b1786d for huge popularity across the world. For example, Snoop Dogg was featured on K-Pop group Girls Generation’s track and Kanye West worked with JYJ on a song. Without globalization, Americans would have never even heard of K-Pop. let alone be so invested in it. However, because the world is so interconnected nowadays, music fans have the ability to share their favorite music with people all over the world. South Korea’s music market has profited greatly from this and will likely continue doing so.

Brazil

While Latin American countries used to be left in the background with regards to the music industry, they are now at the forefront due to the “improvements in technology, infrastructure and standards of living…prompting something of a digital music gold rush.” When record sales were the big focus, leaders of the entertainment industry ignored these markets because there were person-apple-laptop-notebook-largehigh rates of piracy, but now that internet use, social media, and digital services have become so huge, people are keeping an eye on these areas. As the ninth largest market for recorded music, Brazil specifically has become a significant country for companies in the music industry to pay attention to. In the past year, subscription services revenue in Brazil has increased by 22.1 per cent, driving up the whole music market and delivering more profits than downloads. The evolution of technology in this area, as well as better internet security, has been pivotal in making Brazil one of the most significant areas for music. More and more artists are adding Brazil to their touring schedule, something that was very rare just a few years ago.

Another unique aspect of Brazil’s music economy is the fact that mphoto-1421757350652-9f65a35effc7obile personalization products are still hugely popular, which is not the case in other markets. Products such as ringtones and ring-back tones increased by 11.8 per cent in 2014 and make up 19 per cent of the digital market. In other countries, mobile personalization is no longer popular, even though it used to be in the early to mid-2000s. It will be interesting to see if this is a lasting phenomenon, or simply a fad as it was in other countries.

Overall, Brazil, as well as other Latin American countries, are projected to be highly lucrative markets for the music industry. It will be interesting how they evolve as time goes on. As Peggy Dold, founder of Navigation Partners and former VP of International at Univision Music Group, states:

“I believe everyone should pay attention to Latin America…They shouldn’t be afraid of it. But it really does involve education, and communication with the people who are there locally. After all, it’s an incredibly rich cultural tapestry, a continent made up of generations of people who just love and appreciate music.”

It truly is unfortunate that most people focus solely on the U.S. and U.K. music markets even though there are so many other countries with fascinating and highly successful markets. When one really delves into a given nation’s music habits, they are bound to find tons of interesting information and insight into the culture and values that make certain things popular. At Quantone, we are working on translating all of our music metadata into Japanese, as that is such a huge music market. It is important that metadata is correct and easily accessible to anyone who wants it. As these markets continue their rapid growth, companies are no doubt going to attempt to take advantage and profit from those untapped markets. It will be interesting to see what the future holds for these, and other highly successful music markets.

Evan Stein

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